The Canadian dollar (CAD) has recently faced downward pressure as the USDCAD exchange rate has surged above 1.38, driven by a cautious Bank of Canada and a robust Federal Reserve that bolstered the US dollar. Analysts express that the CAD's performance may closely align with oil price fluctuations, given Canada’s status as a major oil exporter. As of late April, oil prices have rallied to $72.53, significantly above the 3-month average of $67.95. This resurgence in oil prices has provided some support for the CAD, although the industry remains sensitive to prevailing market conditions.
Recent political and economic developments have also influenced the CAD. Political instability stemming from Prime Minister Justin Trudeau's resignation has created uncertainty, while trade tensions between Canada and the U.S. due to imposed tariffs are raising concerns about the CAD's outlook. The Bank of Canada’s decision to pause interest rate cuts at 2.75% was initially supportive for the loonie; however, experts warn that expected U.S. tariff measures could cap any significant upside for the CAD.
On the other side, the Pakistani Rupee (PKR) is under pressure as 29% reciprocal tariffs from the U.S. negatively impact trade dynamics. Additionally, escalating tensions, highlighted by military conflicts with India, present risks to the PKR. Despite migrant workers sending home record remittances, many are reportedly doing so cautiously ahead of a dire job market, primarily affecting domestic economic conditions.
Currently, the CAD to PKR exchange rate is at 60-day lows, sitting near 204.5—about 0.7% below the 3-month average of 206. The trading range of the CAD/PKR has been relatively stable, fluctuating between 200.9 and 209.5, indicating a lack of volatility in recent weeks.
In summary, the CAD's potential for recovery lies largely in the oil market's behavior and the outcomes of ongoing trade negotiations. Meanwhile, the PKR faces significant challenges stemming from geopolitical tensions and unfavorable trade dynamics. As these factors evolve, they will undoubtedly continue to affect exchange rate movements, making close monitoring essential for individuals and businesses engaged in international transactions.